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Advisor Tested: How LinkedIn can truly build your business and not just feed your ego

Asking to stay in touch beats a cold call hands down

Monday, February 7, 2011 – 2:55 PM by Judy Messina
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Jessica Maldonado: At the end of the day, people want to help other people.

Think of it as Rotary Club — writ large. Many advisors still avoid LinkedIn because it seems daunting, confusing and has a (mostly unnecessary) aura of compliance danger. Yet, LinkedIn has become one of the Web’s most popular tools for creating and nurturing professional relationships. Advisors who are using it reap rewards in the form of new contacts, leads and employees.

Here are the basics: Members post detailed profiles on LinkedIn, which is free at the no-frills level, and invite others to join their networks. Over time, these networks grow to include the contacts of existing contacts. Some advisors use these contact lists to find and vet leads, although they can’t reach out just anyone. If you’re not reaching out to one of your direct connections, you must ask for an introduction by someone else in the network. That feature is key to LinkedIn’s business proposition that it expands “trusted” contacts. Advisors say that for the most part no one turns down a request for an introduction.

Members typically post videos, presentations, links to articles, almost anything that raises their visibility and keeps the connections going. Companies can do the same, putting up profiles and other material that describe their employees, their expertise, even their growth rate, making it easy for potential clients and job seekers to check them out.

Members can also try to develop relationships by starting or joining groups. There are hundreds of them on LinkedIn, catering to specific professions, to narrow specialties within a profession or to specialized interests, such as the Biotech Investment Group, which has nearly 3,800 members. For investment advisors, there are 29 groups, including seven for RIAs. The largest of these is RIA MarketplaceTM which now has over 4,000 members. It also allows non-advisors closely connected to the industry to join. Groups disseminate articles and information, notify members of upcoming events, and provide a forum for discussion. Many run subcommittees on different topics.

LinkedIn is also becoming a popular recruiting site. A 30-day job posting costs $100. One investment technology company, Adhesion Wealth Advisor Solutions Inc., now uses it to post jobs, saying it yields more qualified candidates than other web-based recruiting sites. Job seekers can search for open positions and probe to find out whether they know anyone with a connection to a hiring firm or a hiring manager.

Premium membership, with different levels running from $24.95 to $99.95 a month, includes features such as organizing tools, access to more contacts and priority customer service.

One downside: some group members make solicitations even within group discussions, which can be distracting and intrusive. Also, to make LinkedIn useful, members have to keep their profiles up to date — not a major task, but one that requires some attention. Even though many companies promote products and services on LinkedIn, advisors will want to make sure that they are in compliance with SEC regulations that prohibit such things as testimonials and recommendations. That may mean setting up social networking standards for the firm and monitoring profiles and groups in which employees are active.

Jessica Maldonado, a vice president with Searcy Financial Services in Overland Park, Kansas, is a LinkedIn member and a savvy social media user. She – and the firm – have accounts not only on LinkedIn but on Twitter and Facebook.

What made you establish a LinkedIn account?

We have been early adopters of technology all along the way. I did some digging, seeing how people were using LinkedIn, the pros and cons, and we made a determination as a company that there was value to LinkedIn. I started using it myself a couple of years ago and set my profile up as a template of what we were going to do for [everyone in] the firm.

Do you have a premium account?

No. I’m not sure that it’s worth it to me right now since I’m getting so much use out of the free version. If I hit a wall, then absolutely.

Do you participate in groups? How useful are they?

I participate in a lot of groups. I do a lot in the retirement space. I’m linked to groups on fiduciary issues and to 401(k) groups. (For more on Searcy in the retirement market, see: See: TD Ameritrade and Pershing are making moves to win RIA 401(k) assets).

There have been several new relationships I’ve been able to develop and doors that have opened as a result of the groups. For example, when I announced in various groups that I am speaking at a fiduciary symposium in early March, a gentlemen [in one of the groups] sent me a message through LinkedIn, [asked me to post the symposium information in a group that he started for 1,600 CPAs and attorneys and said he would] make it a featured article until the symposium is over. I don’t know this man, but he looked at me, the people I’m linked to and said “I need to know her.”

How many connections do you have and how do you use them to network?

I meet a lot of people and I’m very selective about who I link in with. I have 153 connections, but I’m strategically connected to some people. There have been times when I’ve looked at a connection and realized: They’re connected to somebody else I need to know. So, I say, “Chris, can you introduce me to John?”

Also, because I work with a lot of retirement plans, I’m always looking for new plans I can get introduced to. I use other tools to find out the 401(k) plans I may want to go after and then, if I want to be introduced to somebody at a company, I try to find who in my network knows that company. Usually, I can find somebody within one to two degrees of separation. It’s so much better.

Have you gotten new business by networking through LinkedIn?

I have gotten introductions and there are things in the pipeline. Some people may just say “Would you mind staying in touch?” That’s a whole lot better than a cold call. At the end of the day, people want to help other people.

Do you find it annoying to have solicitations pop up in the groups you belong to?

By and large you can just ignore them. They’re a minor inconvenience, given the great stuff you get out of it.

How do you make sure the firm and all the employees are in compliance with SEC regulations when they are using LinkedIn?

We created parameters for the summary section, the experience section and the specialties section of the profile. They all have the same look and feel. It’s okay to have personal information there –your unique role and the unique value you bring to the firm. We just require that people get it approved first.

We also have a social media policy, what employees can say on social media. There are things in it that are specific to LinkedIn, things that are specific to Facebook and things that are specific to Twitter. It’s perfectly okay to disseminate information that is publicly available or, if you’re using LinkedIn as a way to connect people and resources, that’s fine. But we don’t ever put anything out that would be a no-no; we never talk about performance; we never make recommendations.

On quarterly basis, we go through every tech resource we have with fine tooth comb to see what’s changed, the profile and privacy settings, whether there’s anything we need to add or take away. We verify that everything is correct and run it through compliance.

Are there any negatives to using LinkedIn?

It’s not a negative, but I find it’s hard to keep up with it. The hardest thing for me is to remember is to be intentional about updating my statuses and finding newsworthy articles to send out to various groups I’m involved in. If you’re not staying connected with people, updating your status and posting information that is useful, you’re out of sight, out of mind. It doesn’t take a ton of effort.

Judy Messina’s last Advisor Tested column was about the iPad: See: Advisor Tested: iPad proves ideal for advisors on-the-go; the surprise is the effect on clients.

Scott Annan

Scott Annan

February 8, 2011 — 2:19 PM

I think you’re right that Linkedin can be a great site to build your network and develop leads. But as you say, it’s hard to keep up with when you’re trying to stay on top of trending topics and new ideas. Another solution is to use Linkedin as a way to build new connections and use personal CRM tools like http://networkhippo.com to manage those relationships and build deeper relationships with ongoing connection “offsite”. Just participating in the flow of social networks rarely develops into deeper connections.

Thanks for the post!

Marie Swift

Marie Swift

February 20, 2011 — 9:47 PM

Hi Judy,

Thanks for this article. Good stuff. I know Jessica Maldanado quite well, having worked with her on a couple of articles for industry trade publications and panel presentations for TD Ameritrade Institutional’s 2011 annual conference (which happened to be on the topic of social media). Jessica’s experiences, as outlined in the article by you, are in line with what I am hearing from most advisors I converse with at industry conferences, online, etc. I’m looking forward to your next Advisor Tested piece!

Marie Swift
Impact Communications

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